AJAY NEGI’s Post

💡 Alternative Investment Fund 💡 Alternative Investment Fund or AIF is a privately pooled investment vehicle that invests in alternative asset classes such as private equity, venture capital, hedge funds, real estate, commodities, and derivatives. Generally, HNIs (High net worth individuals) and institutions invest in the AIFs as the investment amount is substantially higher. ♦ Types of AIFs in India AIFs can be further divided into three categories, such as:  Category I AIF: This category of AIF invests in start-ups, early-stage ventures, social ventures, SMEs, or infrastructure or other sectors considered socially or economically beneficial by the government or regulators fall into this category. It may be further classified into:  1) Venture capital funds (Including Angel Funds): This fund specifically invests in start-up or early-stage ventures that have high growth potential.  2) SME Funds: This fund invests in small and medium enterprises with a good track record in profitability and growth.  3) Social Venture Funds: This fund invests in companies that aim to make a positive impact on society or the environment, such as sustainability, clean energy, etc. It has also generated favorable returns in the past.  4) Infrastructure funds: This fund invests in infrastructure projects such as railways, bridges, airports, etc. Category II AIF: These are the AIFs that do not fall under categories I and III. They do not use leverage or debts other than to cover their day-to-day operational expenses. Some of the funds included in the Category II are as follows:  1) Private Equity Funds: It makes equity investments in unlisted companies and helps them to raise capital. As unlisted companies face problems in raising capital through debt or equity, private equity funds allow them to raise capital easily.  2) Debt Funds: This fund invests in the debt securities of the unlisted companies via debt instruments such as bonds, debentures, and other fixed-income instruments. 3) Fund of Funds: This fund invests in multiple AIFs. It doesn’t directly buy stocks or bonds. Instead, it invests in a portfolio of other investment funds. Category III AIF: These AIFs use complex trading strategies in their investment. It may use leverage or debt for investment in listed or unlisted derivatives. Some of the funds included in Category III are:  1) Private Investment in Public Equity Fund (PIPE): This fund invests in the equity of companies that are listed on the stock exchange. This often happens when the value of the company’s shares has dropped, and the company is looking to raise capital. Hence, in this case, AIFs receive the equity at a discounted price.  2) Hedge fund: Hedge fund uses various investment strategies like short 2) selling, arbitrage, futures, derivatives, and margin trading to generate maximum returns for the investor. #finance #aif #alternatefunds #invstment #research #equity #analyst Equivaluesearch #hedgefund #privateequity #venturecapital

Alternative Investment Fund (AIF) _________________________________________ AIF is a privately pooled investment vehicle that invests in alternative asset classes like ➡ private equity, ➡ venture capital, ➡ hedge funds, ➡ real estate, ➡ commodities ➡ derivatives. - Generally, HNIs (High net worth individuals) and institutions invest in the AIFs as the investment amount is substantially higher. - AIFs are regulated by the SEBI (Securities and Exchange Board of India). As per the SEBI (Alternative Investment Funds) Regulations, 2012. - An AIF can be set up as a trust, a company, a limited liability partnership, or a corporate body. However, many of the AIFs that have been registered with SEBI are in the form of trusts. - AIFs in India: AIFs can be classified into three categories:  💠 Category I AIF: This category invests in 🔺 start-ups, 🔺 early-stage ventures, 🔺 social ventures, 🔺 SMEs, or 🔺infrastructure or other sectors considered socially or economically beneficial by the government or regulators fall into this category. It may be further classified into:  🔹 Venture capital funds (Including Angel Funds): specifically invests in start-up or early-stage ventures that have high growth potential.  🔹 SME Funds: invest in small and medium enterprises with a good track record in profitability and growth.  🔹 Social Venture Funds: invest in companies that aim to make a positive impact on society or the environment, incl. sustainability, clean energy, etc. 🔹 Infrastructure funds: invest in infrastructure projects such as railways, bridges, airports, etc.  💠 Category II AIF: AIFs that do not fall under categories I and III. They do not use leverage or debts other than to cover their day-to-day operational expenses. Funds included in the Category II are as follows:  🔻 Private Equity Funds: makes equity investments in unlisted companies & help them raise capital. Unlisted companies face problems in raising capital through debt or equity, private equity funds allow them to raise capital easily.  🔻 Debt Funds: invests in the debt securities of the unlisted companies via debt instruments such as bonds, debentures, & other fixed-income instruments. 🔻 Fund of Funds invests in multiple AIFs. It doesn’t directly buy stocks or bonds. Instead, it invests in a portfolio of other investment funds. 💠 Category III AIF: use complex trading strategies in their investment. It may use leverage or debt for investment in listed or unlisted derivatives. Funds included in Category III are:  🔺 Private Investment in Public Equity Fund (PIPE): invests in the equity of companies that are listed on the stock exchange. This often happens when the value of the company’s shares has dropped, & the company is looking to raise capital. In this case, AIFs receive the equity at a discounted price.  🔺 Hedge fund: Hedge fund uses investment strategies like short selling, arbitrage, futures, derivatives, and margin trading to generate maximum returns.

SEBI examines draft framework for Alternative Investment Funds, Venture Capital Funds to manage unliquidated investments beyond tenure expiry   The Securities and Exchange Board of India (SEBI), through its consultation paper dated 12th Jan 2024 ("Consultation Paper"), has proposed to provide flexibility to Alternative Investment Funds (AIFs), Venture Capital Funds (VCFs) and their investors to deal with unliquidated investments of their schemes beyond the expiry of their tenure.   On June 15, 2023, SEBI amended the AIF Regulations of 2012, to provide flexibility to AIFs to deal with the investments of their schemes which are not sold due to lack of liquidity, by selling such investments to a new scheme of the same AIF i.e., a Liquidation Scheme. The Liquidation Period under the same is of 12 months for the said purpose.   However, participants of the AIF industry highlighted that setting up and managing a liquidation scheme involves time, costs and efforts which would be ultimately borne by the investors. There were also certain tax related issues that come in the way of an efficient implementation of a liquidation scheme.   In the recent Consultation Paper, SEBI has proposed that AIFs may enter into a Dissolution Period/Process to deal with unliquidated investments of their schemes upon the completion of their tenure without having the need to launch a liquidation scheme for this purpose. For this, AIF will have to get 75% positive consent of its investors and after that, they shall arrange bids for a minimum of 25% of the value of the unliquidated investments.   SEBI has also proposed to provide flexibility to AIFs whose liquidation period has already expired or will expire within 1 month from the date of notification in this regard by giving them a fresh one-time Liquidation Period of 1 year that shall begin from the date of notification of amendment to AIF Regulations in this regard.   SEBI also noted that VCFs registered under the erstwhile VCF Regulations of 1996, are required to liquidate their investments within 3 months from the expiry of their tenure. Whereas under the AIF Regulations, such timframe is 12 months. In this regard, SEBI has proposed that a new framework may be established for the migration of such VCFs to the AIF Regulations so that even such VCFs can avail this new flexibility for dissolution process.   Accordingly, SEBI has proposed that such VCFs will be categorized under “Category I AIF – (Migrated VCF)” by inserting a separate Chapter III-D and such VCFs shall migrate within 6 months of the SEBI’s notification in that regard. SEBI envisages a smooth facilitation process and cost-effective migration.   SEBI has invited public comments on this consultation paper latest by February 2, 2024. If the proposals are implemented, then it would certainly provide a greater flexibility to AIFs in regards to their liquidation process while mitigating their concerns. ANB Legal- India @Aditya Kumar #aif #sebi #investment

🌇 How To Invest In Alternative Assets Individual investors too often ignore alternative assets. That's because they’re not aware of the options available to them: ▶️ Alternative Assets ETFs Those are like your normal ETFs, but packed with alternative investments like real estate, gold, or even strategies similar to those used by hedge funds. Examples: iMGP DBi Managed Futures Strategy ETF,  IQ Hedge Multi-Strategy Tracker ▶️ Alternative Assets Mutual Funds Similar to the ETFs, these are pools of money from many investors that are managed by professionals and invest in alternative assets. Useful if you're looking to get into things like commodities or private debt without having to pick and choose yourself. Ex: TIAA-CREF Real Estate Securities Fund ▶️ Publicly-listed Private Equity Companies Here, you're investing in companies that specialize in private equity and are available on the stock market. But remember, you're investing in the company itself, not directly in its private assets funds. Ex: Blackstone, Apollo Global Management, Inc., KKR ▶️ Business Development Companies (BDCs) BDCs are special companies that invest in small and medium-sized businesses, providing them with the debt and equity financing they need to grow. You're essentially lending money to these smaller companies indirectly, and in return, you often get high yields. Ex: Ares Management Corporation, Main Street Capital Corporation ▶️ Interval Funds Interval funds invest in assets like real estate or private equity, but there's a catch: while you can buy shares anytime, selling them back is only possible at specific intervals. Ex: PIMCO Flexible Credit Income Fund ▶️ Crowdfunding Platforms This is your chance to be part of launching new businesses or projects, potentially earning equity, products, or other rewards. Investing through crowdfunding is direct and engaging, offering a thrilling way to support innovation. Ex: Kickstarters, Indiegogo, SeedInvest, Crowdcube ▶️ (Retail-focused) Alternative Investment Platforms These digital platforms act as gateways to alternative investments, from fine art to private real estate, for the everyday investor. Previously exclusive opportunities are now within reach without needing deep pockets. Ex: Yieldstreet, Fundrise, Masterworks, CrowdStreet, Patreon Capital, AngelList ▶️ (High-net-worth-focused) Alternative Investment Platforms Professional alternative investment platforms enable high-net-worth individuals to access top-tier private assets funds with lower minimum investments by pooling resources with other investors. If you can afford it, they offer the most attractive investment opportunities. Ex: Treble Peak and Moonfare ▶️ P2P Lending Platforms Through peer-to-peer (P2P) lending platforms, you can lend money directly to individuals or small businesses in need of financing. Ex: Prosper Marketplace, LendingClub Learn more at Finimize 💬 Did I miss any? Which is your favorite? ♻️ Comment, 🔔 subscribe, and like :)

10 Biggest Underperforming Funds: What Investors Should Know Artemis Positive Future Fund The Artemis Positive Future Fund, focusing on global investments, has seen a massive decline, losing 71% against its benchmark. For every £100 invested, the value has dropped to £62 after three years. This stark drop should serve as a red flag for investors relying on this fund to secure returns in a rapidly evolving global economy. Baillie Gifford Global Discovery Fund Baillie Gifford is known for its ambitious investment strategies, but the Global Discovery Fund has not performed well, leaving investors with only £40 for every £100 invested. The 65% underperformance compared to the benchmark is a signal that their high-risk approach may not be paying off as expected. FTF Martin Currie Japan Equity Focused on Japan’s equity market, the Martin Currie Japan Equity fund has significantly underperformed. With returns plummeting to £53 for every £100 invested, it suggests that this fund has not been able to capitalise on Japan’s market opportunities. AXA ACT People & Planet Equity Fund Despite its focus on sustainability, the AXA ACT People & Planet Equity Fund has underperformed by 53%, diminishing its appeal to investors who not only want to make a positive impact but also expect solid returns. Aegon Sustainable Equity Similarly, Aegon’s Sustainable Equity Fund has not lived up to its name. Despite being in a booming global sector, this fund has underperformed by 52%, leaving investors with £82 for every £100 invested. IFSL Marlborough Global Innovation Fund Innovation funds are often considered high-risk, high-reward. However, the IFSL Marlborough Global Innovation Fund has failed to meet its benchmark, underperforming by 51%. Investors expecting significant returns on tech and innovation investments will be disappointed by this outcome. L&G Future World Sustainable UK Equity Fund Focused on UK companies, this fund's 51% underperformance reveals that even with a focus on sustainability, fund managers have not been able to navigate the complexities of the UK market effectively. Investors should be cautious before continuing their support of this fund. Baillie Gifford Japanese Smaller Companies Fund Baillie Gifford's second appearance on this list further underscores potential issues with its strategy in international markets. The Japanese Smaller Companies Fund has underperformed by 47%, which should be alarming for those focused on Japan’s economic resurgence. FSSA Japan Focus Fund The Japan Focus Fund from FSSA, like other Japan-centric funds, has failed to deliver substantial returns, leaving investors with only £70 for every £100 invested. Baillie Gifford European Fund Baillie Gifford rounds out the list with its European Fund, which underperformed by 46%. Given the strength of the European markets in recent years, this performance may indicate deeper issues within the fund’s management strategies.

An Alternative Investment Fund, or AIF, is a confidentially pooled investment vehicle developed or incorporated in India that collects assets from expert investors, whether Indian or global, for investing in line with a defined investment policy for the welfare of its investors. Everything to Know about Alternative Investment Fund (AIF) The term “alternative investment fund”, refers to the collection of pooled investment funds that infuse in venture capital, private equity, hedge funds, managed futures, and other types of investments. We can also say that an AIF is a type of investment distinct from traditional investment options such as stocks, bonds, and other debt securities. The Securities and Exchange Board of India’s Regulation Act, 2012 defines an Alternative Investment Fund (SEBI). AIFs can form as a corporation, a trust, or a Limited Liability Partnership (LLP). Generally, high-net-worth people and organizations engage in Alternative Commitment Funds since, unlike Mutual Funds, they need a large initial investment. Types of Alternative Investment Fund (AIF) This category includes funds that invest in start-ups, small and medium-sized firms (SMEs), and new businesses with strong growth potential and is socially and economically viable. 1. Venture Capital Fund (VCF) Venture Capital Funds invest in high-growth start-ups that are experiencing cash constraints in the early stages of their business and require capital to develop or expand their operations. They invest in a variety of businesses based on their company characteristics, asset size, and product development stage. 2. Infrastructure Fund (IF) The fund invests in public assets like road and rail infrastructure, airports, and communication assets, among other things. Investors that are positive about future infrastructure growth can participate in the fund since the infrastructure industry has high entry barriers and little competition. 3. Angel Fund This is a sort of Venture Capital fund in which fund managers combine money from a number of “angel” investors to invest in early-stage firms. Investors receive dividends when new enterprises become profitable. Units are distributed to angel investors in the case of Angel Funds. An “angel investor” is a person who wishes to invest in an angel fund and adds business management knowledge to the table, therefore assisting the company in its growth. 4. Social Venture Fund Socially responsible investment has spawned the Social Venture Fund (SVF), which invests in firms with a strong social consciousness and a desire to have a positive impact on society. These businesses are focused on producing money while also addressing environmental and social challenges. 5. Private Equity (PE) Fund PE funds invest in private firms that aren’t publicly traded with stakeholders. Because the unlisted and unauthorized private enterprises are unable to raise cash with PE funds for help. #finance #economics

Private Equity Funds Explained — Cheatsheet 🏆 What is a Private Equity Fund? Private equity funds are pools of capital used to invest in private companies not listed on public exchanges, aimed at achieving high returns. These funds are generally accessible only to institutional investors, sovereign wealth funds, and high net worth individuals due to their high entry requirements and risk levels. Different Types of Private Equity Funds: Venture Capital (VC): Targets early-stage companies with high growth potential and innovative market propositions, focusing on equity rather than debt funding. Buyout or Leveraged Buyout (LBO): Invests in mature companies, using significant amounts of leverage to acquire controlling stakes and enhance value. Growth Capital (GC): Focuses on established businesses needing funds to expand or innovate without diluting existing ownership significantly. Real Estate: Involves substantial investments in property, ranging from low-risk, cash-flow stable assets to high-risk development projects. Fund of Funds (FoF): Invests in a variety of private equity funds rather than direct company investments, aiming for risk diversification but generally yielding lower returns. How Private Equity Funds Operate: Private equity funds involve limited partners (LPs) who provide capital and general partners (GPs) who manage the investments. GPs handle everything from selecting investments and structuring deals to monitoring progress and planning exits. Impact and Market Role: Private equity is vital for funding small to mid-sized businesses, contributing to economic growth. It supports numerous "unicorns" and operates under less stringent reporting standards than public companies, adding an element of opacity. Private Equity vs. Hedge Funds: While both are alternative investments aimed at sophisticated investors, private equity funds usually involve longer investment horizons and lock-up periods, focusing on long-term capital appreciation. Hedge funds, on the other hand, may seek quicker returns through more liquid and often riskier assets. Key Learning Points: - Private equity funds invest in non-public companies, aiming for high returns through strategic exits such as IPOs or sales. - They offer an alternative asset class with low correlation to conventional market instruments, ideal for portfolio diversification. - The investment landscape for private equity is diverse, spanning from venture capital to real estate and beyond. Visit Financial Edge Training for a free downloadable PE workout👇

I just read the news that Khazanah National Berhad has launched a national 'fund-of-funds' to support Malaysian firms. After delving into the concept of 'Fund' within Private Equity, I see it as a great initiative for local firms to enhance national productivity by ascending the value chain. This endeavor could aid in setting up and nurturing Malaysian startups for global success. Fund-of-Funds within Private Equity offer a robust ecosystem for Malaysia's local startups, combining capital, expertise, and connections to expedite growth and contribute to the nation's advancement across various sectors.🚀🇲🇾 Well done 👏 Sources : https://lnkd.in/g8Z_hGJt

General Partner (GP): Most of the time, GP and LP exist simultaneously. They mainly exist in companies that require large amounts of capital investment, such as private equity funds (PE, Private Equity), hedge funds (Hedge Fund), venture capital (Venture Capital), etc. You can simply understand that GP is an insider of the company. In other words, GPs are those who make investment decisions and manage them within the company. Limited partners (LP): We can simply understand them as investors. Many times, a project requires tens of millions or even hundreds of millions of capital investment. (Most investment companies have many different projects under their umbrella.) The GPs of investment companies don’t have that much money—or they are unwilling to invest so much of the company’s capital in one project to share the risk. There are always people in this world who have lots and lots of cash but no good investment methods - putting it in the bank to earn interest is a pure loss of money in the financial world. Ever since, LP was born. After a series of procedures, the LP hands over the funds to the GP for management. The GP uses the LP's funds to invest in the project and obtain profits from it, and both parties share the profits. This is a typical "you (LP) contribute money, I (GP) contribute" situation in real life. In order to give everyone a more comprehensive understanding, let me talk about some things that LP needs to do during the whole process. In the United States, in most cases, LPs have a minimum investment amount - this figure is usually $6 million. In China, most of the ones I know are 6 million yuan. In other words, if you cannot invest 6 million at one time, others will not even have a chance to enter. In addition, in order to prevent LPs from injecting too much capital, most companies will also have a maximum investment amount—commonly between 10 million and 20 million. But this quota is not inevitable. If the LP itself is relatively strong and can even provide help during the investment process, investment amounts of hundreds of millions can also be seen. In addition, generally LP funds will have a lock-up period (Lock-UpPeriod), which generally lasts from one to several years (depending on the company's specific investment projects). This is to ensure the continuity of investment (an investment cycle that is too short will result in you having to withdraw before you start making money) - that is, if you invest 6 million in the company, you will not be able to withdraw until at least one year later. money.